The hypermarket has grown as a popular grocery format, providing a one-stop shopping destination. However emerging consumer trends, along with stricter legislation on expansion, is prompting superstore retailers to adapt the format in the form of innovative instore services, development of click and collect and downsized stores, resulting in an entirely new large format grocery store concept.

Features and benefits

Uncover range assortments and complementary instore services that can be used to attract shoppers and revive sales in large format stores.

Identify a variety of new ways to reinvigorate the layout of your hypermarket or supermarket by uncovering how other retailers have managed to do it.

Auchan's Chronodrive click and collect model in France allows customers to order products online and collect them at a suitable time from the Chronodrive warehouse. The service saves customers time as well as money on delivery costs. More importantly, the service is a cost effective way of boosting Auchan's revenue and extending its customer base.

Carrefour is consolidating its non-food offer to focus on the best performing categories, which will help it to boost store profitability. The health and beauty sales area has been extented by a substantial 40% with the addition of complementary services, such as a hairdressing unit, while the home department has been cut by 15%.

Just over three quarters of the 1,327 Kmart stores in the US have a pharmacy instore, acting as a complementary service to its health and beauty department. The pharmacies include a seasonal walk-in clinic at the majority of Kmart sites, such as during the flu season, with trained nurses to administer vaccinations.

Your key questions answered

What consumer trends are responsible for the overall change in the performance of hypermarkets? Is there evidence that hypermarkets are in decline?

How can I improve my store layout and what services should I offer to improve sales performance at my large store network?

How can I engage shoppers when they are conducting their grocery shopping and how can I better position myself as a food specialist?

Which products sold in hypermarkets are proving most resilient and which are damaging profit margins? How can I use the internet to maximise my offer?

How can I protect myself from the rising threat of the online and convenience store channels?

OVERVIEW

About the seriesSummary

STRATEGIC ACTION POINTS

Ensure the online offering complements the physical store model Sell large ticket non-food items online Create a click and collect model to allow customers to pick up orders from a hypermarket Create a click and collect model by using a specialized warehouse as a pick-up point Extend the click and collect service to pedestrians and cyclistsOffer additional services and events to improve the shopper experience Add services that offer customers convenience to boost basket sizes Add eating areas to prolong customers' store visits Add services that are complementary to your product offering Host events that promote specialism in your core product area of food Add facilities that allow customers to complete other chores alongside their grocery shop Add electric vehicle charging points to your car park to promote sustainability initiativesRationalize your food and non-food categories Rationalize your SKU count across all categories Remove or cut down underperforming non-food categories, such as DIY and electricals Enhance the clothing offer to attract female customers, focusing strongly on childrenswear Extend the health and beauty department to capitalize on resilient spend in this category Improve the soft DIY and homewares offer Adapt the non-food proposition on a store-by-store basis to meet local demandsModernize the store format and layout to better suit customers' needs Downsize the store to create a compact hypermarket Segment the store into clear departments to create a modular store layout Divide the store clearly into food and non-food by providing separate entrances Widen aisles and lower shelves to improve instore navigation for customers Add large, clear signage and banners to promote pricing and make products visible throughout the store Adapt the store to suit the rising population of elderly shoppersCreate an additional revenue stream by opening shopping centers in high footfall locations Open up hypermarkets as anchors to shopping centers Add leisure and entertainment facilities to your hypermarkets

STRATEGIC CONTEXT

Several developments are motivating hypermarket retailers to revitalize their format Social and demographic changes are impacting consumers' shopping patterns New channels are emerging as credible competitive threats to the hypermarketA number of operational factors need to be taken into account by hypermarket retailers Rapidly developing urban areas are creating new catchment areas for hypermarket retailers Some retailers are considering creating an entirely new hypermarket format and brand The size of the hypermarket is changing to fit new locations The layout and design of a hypermarket may have to be amended to improve navigability for customers Category choice across non-food may have to be rationalized to improve sales densities and margins Changing consumer demand is prompting retailers to rationalize their food product assortment Adding additional services can improve the hypermarket offer Adapting pricing strategies is a fundamental consideration for retailers looking to improve footfall Utilizing the online channel can complement sales at physical hypermarkets Other store formats and channels can act as an alternative point of expansion

STRATEGY IN FOCUS: RETAILER CASE STUDIES

Downsizing formats allows hypermarket operators to enter new catchment areas Downsized stores are proving a better fit for changing demographics Carrefour's hypermarkets are gradually decreasing in size Meijer launched a small format in the suburbs of Chicago in 2010 Walmart is using a smaller format to target untapped customers in rural regions in growth marketsRetailers are increasingly opening hypermarkets in shopping centers Shopping center development is a profitable venture for hypermarket retailers Aeon's shopping center subsidiary is outperforming its retail business Carrefour's partnership with Klépierre has allowed it to boost footfall to its hypermarkets that anchor mallsHypermarket retailers are adapting their store layouts to improve mobility New hypermarkets have a more modular and spacious layout The new Carrefour Planet stores feature segmentation by category The refurbished Tesco Extra store in Wembley features a departmentalized non-food area German grocer Edeka has adapted the layout of selected stores in response to the aging populationRetailers have been rationalizing their product counts to reduce operational costs Underperforming SKUs are being cut down to reduce inventories and simplify the supply chain The SKU count across food categories in Carrefour hypermarkets has been rationalized Supervalu plans to complete the roll out of its SKU rationalization strategy by spring 2011Hypermarket retailers are complementing instore services with their online channel Online shopping is on the rise as consumers seek convenience and price transparency Auchan has formed the E-Drive subsidiary to manage the click and collect business Casino is increasingly selling the bulk of its non-food items via CdiscountExtra services and events are being added to utilize space in hypermarkets Retailers are promoting their expertise in a few chosen categories through complementary services Additional services and events have been introduced to Carrefour Planet Kmart's instore services focus on healthcare and everyday chores Loblaw has diversified into mobile phone stores and continues to expand its cookery coursesRetailers are strengthening their non-food sales by focusing on high performing categories Curbed spending across non-food has prompted retailers to concentrate on the best performing categories Carrefour has segmented its Planet store format to concentrate on a rationalized selection of non-food categories Casino is drastically rationalizing its non-food offer at Géant Casino to enhance margins Albert Heijn only recently introduced comprehensive non-food ranges in its large format stores